Tennessee Gov. Bill Haslam leads a discussion during a meeting of the Health and Human Services Committee at the National Governors Association convention on Saturday, July 12, 2014, in Nashville.

Photo by
Associated Press/Times Free Press.

NASHVILLE - He's dealing with a new U.S. Health and Human Services secretary, but Tennessee Gov. Bill Haslam is running into the same problem with Sylvia Mathews Burwell as he did with her predecessor when it comes to winning federal approval of his Medicaid-expansion plan.

Haslam said Sunday he personally spoke with Burwell, who succeeded Kathleen Sebelius, about his long-stalled effort to gain federal approval for his "Tennessee Plan" on expanding Medicaid to an additional 160,000 low-income people under the Affordable Care Act.

Among the agency's criticisms: Tennessee's $35 million new computer system is still not up and running.

Today is the deadline for the state's mitigation plan for having not met ACA application requirements, and Haslam said the deadline will be met.

While Haslam described the overall conversation with Burwell as "positive," he said the secretary's position on his "Tennessee Plan" remains that "there are some bright lines which they don't think they can cross. There's some other areas they want to be very flexible."

Major "bright lines," Haslam said, include "what's covered and how can you incentivize healthier behavior."

Haslam acknowledged one of those areas is his hope to use co-payments for the estimated 160,000 Tennesseans who would be brought in through the expansion.

"We think there are certain things you can do, where they're not as convinced they have the Congressional flexibility as we think they do," Haslam said. "Some of that's places where we think the law does allow you to do that, and they're saying 'we don't think it does.'"

Advocacy groups have said ever since Haslam unveiled his plan last year that federal law won't allow the Obama administration to increase co-pay limits beyond what is permissible under Medicaid. There's a reason for that, they argue: While co-payments are intended to make people think twice about seeking unnecessary services, even small ones can discourage poorer people from seeking care at all.

The Medicaid program serves low-income people. Under the 2010 Affordable Care Act, the federal government is paying the entire cost for the first three years of a Medicaid expansion aimed at low-income adult men and women. The program began in January and a number of states have gone along with the expansion.

Haslam, who faces difficulty getting approval from fellow Republicans in the state Legislature, is trying to get a plan that will cut costs and increase healthy behaviors and win approval from GOP lawmakers.

Haslam said he and Burwell also discussed the recent letter that CMS Director Cindy Mann sent his administration saying Tennessee is failing to meet ACA application requirements.

In his meeting, he said, "we had a chance to explain there were some factual inaccuracies in that [criticism]. But we had a really good 20- to 30-minute conversation that I'd term introductory."

Burwell was unavailable for comment. She left a later closed-door meeting with Haslam and other governors through a side door. That meeting focused mostly on many governors' concerns over their costs for dealing with the influx of thousands of children entering the country illegally in recent months.

Haslam's TennCare Chief Darin Gordon told reporters on Saturday "that there were some things in that [CMS] letter that were just patently inaccurate. Even if you look at their own website it would contradict some of the things that were included in the letter."

He said the letter noted Tennessee hadn't completed "any" of seven "success factors" in developing an adequate application process designed to get people enrolled. But that's not the case, he said.

For example, Gordon said, the state was criticized for having in-person assistance for would-be enrollees in only a few of Tennessee's county-level Human Services Department offices.

"And it's like no, it's in every one of our DHS offices in all 95 counties," Gordon asserted. "The people who were there to help weren't all certified as certified application counselors at that time, but they were by April. And they [CMS officials] know that."

But the major issue with the TennCare application process appears to be getting a new computer system to handle online applications. Gordon said Northrop Grumman, the company that won the bid, doesn't have an operable system at this point.

"I want to be in a better place than where we are," Gordon said. "Ideally I want my system to work. I am not the type person, though, that is going to tell a contractor to turn on a system that hasn't been sufficiently tested."

He added, "you see the ramifications of that, not only with the federal government, but some states that went live with their systems have had to now turn them off."

He said the state has an outside vendor coming in to provide "an assessment of really what we can expect on the system being at a finishing point.

"The reason I'm doing that is because I've lost some confidence in the current vendor's ability to estimate or project, because they've missed some dates, obviously," Gordon added.

"Depending on how long they [outside contracting experts] say -- I'm not going to tell you what that switch is -- but if it's beyond a certain point, then I'll have difficult decisions to make than if it is soon."

Gordon indicated that could mean a new contractor to bring up a functioning system.

"I don't want to jinx that whole outcome, but that could be if you look at other states today: Oregon, Maryland, Massachusetts ... . They are going in different directions than they originally started, meaning the vendors."